Actavis Plans Layoffs Due to Overlaps in Corporate Functions after Allergan Deal

Generic drug firm Actavis would layoff employees and expand in China, as it goes ahead with its acquisition of Botox maker Allergan.

Bloomberg, citing an interview by CEO Brent Saunders on Bloomberg Television, reported that the company plans to cut employees as there are overlaps in corporate functions, including human relations and finance.

However, Saunders did not say how many positions would be affected by the move.

"There are clearly synergies," Saunders said in the interview on Bloomberg Television.

"That means we're going to have do some cutting but we're going to do that very carefully because these are two growing companies."

Actavis earlier agreed to buy Allergan for $66bn (€53bn, £42bn) in a deal making it one of the world's 10 biggest drugmakers. The deal also ended hostile takeover efforts of the Botox maker by Valeant Pharmaceuticals International Inc led by activist investor Bill Ackman.

Allergan had described Valeant's offer as "grossly inadequate" and argued the Canadian company will reduce its research and development budget and use its cash flow to pay its debt accumulated from previous acquisitions.

The deal was unanimously approved by the boards of directors of both companies and is anticipated to be completed in the second quarter of 2015.

Following the deal, Actavis plans to sell Allergan products across the globe. In particular, it plans to take anti-wrinkle medicine Botox to China.

Allergan has a few overlapping products with Actavis, which will decide on which parts of the management team to bring in from Allergan.

"We take a best athlete approach to it," Saunders said. "We're viewing this as a combination, not an acquisition."